A truck that cost $18,000, was estimated to have a salvage value of $4,000, and was expected to last 10 years. At the end of 5 years of use (assume straight line depreciation), it was sold for $15,000, the journal entry to record the sale will involve a:

Question

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The truck depreciates $1,400 per year (($18,000 - $4,000) / 10 years). After 5 years, accumulated depreciation is $7,000. The book value is $11,000 ($18,000 - $7,000). Selling for $15,000 results in a gain of $4,000, not $8,000.

A Truck That Cost $18,000, Was Estimated to Have a Salvage